Columbia Gas of Ohio proposes tripling its monthly fixed rate for natural gas
Columbia Gas of Ohio is asking the Ohio Public Utilities Commission to approve nearly tripling the flat, monthly distribution charge 1.4 million customers pay before the cost of natural gas usage is added to the bill.
If the PUCO approves the 2021 request, the fee would rise from about $17 a month to about $46 a month.
Eric Hardgrove, director of state communications for the company, said the company hasn’t asked for an increase like this since 2008 and it has evidence to prove the increase is necessary.
“To continue to provide safe, affordable and reliable natural gas service, we must continue to invest in our system to upgrade aging infrastructure, just as investments are made in bridges, roads and other infrastructure in our cities, towns and communities,” said Hardgrove.
The company did not provide someone for an interview and did not answer questions requesting explanations and more information.
The Ohio Consumers' Counsel, a state agency tasked with looking out for consumers during rate increase requests and other situations, thinks the ask is way too big and would hurt low-income users.
"The high monthly fixed charges have a disproportionate adverse impact on low-income and low-use residential consumers. And they also deny consumers the ability to lower their gas bills by reducing their usage,” said J.P. Blackwood, acting manager of public affairs at the OCC.
Columbia Gas’ proposal would raise $212 million by increasing the monthly distribution service fee, which could rise even higher than $46 a month to $80 a month in five years, according to the OCC.
In a 255-page staff report, the PUCO recommended an increase in the fee that would generate $35 million to $58 million for the company.
The consumer protection agency thinks the company should be limited to an increase resulting in $10 million in new revenue.
Blackwood said the company has had plenty of other increases in the last 14 years, even if this figure hasn’t increased. Their ask is simply too high and asks for funds outside of the mission to provide natural gas, Blackwood said.
“The OCC has reviewed various expenses that Colombia has presented. And the kind of charges that they can charge to consumers are items that are ‘in use and useful’ for providing a safe natural gas supply to consumers. That's what they need to charge for, the items that are ‘in use and useful’ for providing that safe, reliable natural gas to consumers. And that's what they should be allowed to charge for,” Blackwood said.
Columbia’s proposal would leverage an 11% profit. The PUCO proposal would create a 9% to 10% profit for the company.
The OCC wants to limit the profit to 8.7%.
"Well, one of the things we looked at was what we consider to be a fair amount of profits for Colombia. They've got a pretty secure investment and they've got a captive consumer base- they're operating as a monopoly. And we feel that an 8.7% profit is an appropriate level of profit in that scenario," Blackwood said.
The OCC also wants the PUCO to order Columbia Gas to create a $10 million fund for bill-pay assistance and said that consumers shouldn’t be charged in order to give bonuses to executives.
With inflation and other financial concerns, Ohio consumers don’t need a fixed increase to their bills, Blackwood said.
"This is a really bad time for a 27% increase in consumer bills and possibly more as those fixed rates increase. It's a big concern,” he said.
The PUCO is expected to make a decision in the fall, but the case could take longer to go through the process.
A meeting to gather public input on the proposal is scheduled for 6 p.m. Thursday, June 9 at the Whetstone Park Shelterhouse in Columbus. People can also submit comments online or by mail. For more information and instructions, visit occ.ohio.gov/columbia.